Chapter 64 [The only thing you need to do when investing is to have confidence in the United States! 】

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[James Origin and Today] Chapter 64 - Investment The only thing you need to do is to have confidence in the United States! (09/12/2023)

Watch "[00046] Investment and Financial Management Instructions (14) Buffett's Investment Wisdom (7) 05/15/2018 CLEC Club" on YouTube

https://youtu.be/2_lZnp21yUE

Buffett's point of view: "No matter how many disasters and wars the United States has experienced, the U.S. index has continued to rise for a long time. 』

Buffett said: 2018 shareholder meeting

If you had invested US$10,000 in the S&P 500 in 1942 and acquired a share of American companies, how much money would you have today? The answer is US$51 million. You don’t have to do anything, just wait quietly, and these ten thousand US dollars will be converted into these fifty-one million. You don't need to look at the daily rise and fall, you don't need to analyze how it's going, and you don't need to listen to gossip and what analysts say. You just invest your money and wait until now. You don't have to do anything. That's it. The only thing you need to do is have faith in the United States, and that's it! You don't need to pick which stocks will win, you just need to make a simple investment decision like this! This is not the only period, you can choose any period in history.

Buffett added: "I want to make another comment. It's very interesting. You use this ten thousand dollars. You hear a lot of gossip. If you keep listening to this kind of gossip, you use this ten thousand dollars to buy gold. At that time, you could buy 320 ounces of gold. After time, it still only has 320 ounces of gold. It will not produce output. It will not produce the same output as American companies and agricultural products. And from 1942 to today, you will not increase anything. You still only have 320 ounces of gold. Today, 320 ounces of gold are only worth about $40,000. If you keep listening to some pessimistic rumors, it will affect your investment. The United States has always had great tailwinds. As an investor, in such a tailwind environment, unless you buy a very wrong stock, your investment will be affected. Index, you will never fail. Because you continue to invest in the U.S. economy. This benefit is unparalleled, and it does not mean that you buy something that has no output at all. The two are not comparable. Many people will spend a lot of money to find investment consultants and listen to the advice of experts, and they will not really receive the benefits you really want.

When it comes to buying stocks, you just need to stick to a simple idea. This simple idea will do better than any other tip investment idea. It will be more useful than paying an investment adviser a lot of money or listening to the tip. You can defeat these people without spending any money or time. You don’t need to know any professional knowledge about accounting or financial reporting. You don’t need to understand these proper terms, or pay attention to what the Federal Reserve is going to do. You only need to have confidence in the U.S. economy, because in your lifetime investment behavior, you only need to have such a purpose, that is, you persist in the long term, and you know what you are doing, with a happy and optimistic mood.

If given the choice between investing in stocks and bonds, Buffett can decide to invest in stock assets within a minute. With an investment cycle of thirty years, the U.S. stock market far exceeds the 30-year Treasury bond.

When people invest in the stock market, they pay too much attention to price. It is not investment to pay too much attention to price. Investment is to pay attention to the business of an investment company. Investing in an index fund is really like a business savings account. (Investing in the U.S. Index means investing in U.S. companies and the U.S. business model).

Some people are not suitable for investing in stocks. Their psychological quality is too easy to be nervous and uneasy, especially about price fluctuations. If you do something stupid because the stock price has fallen, such people are not suitable for investing in stocks. Selling your stocks when the market is down is a fool's errand.

When you are baptized by the market and you are educated as a long-term investor, you know that usually the longer you hold stocks, the lower your risk, but the opposite is true for bonds, the longer you hold them, the higher the risk.

As long as you invest in the United States and let time make money for you, you will be as rich as me (Buffett).

James added annotation:

The U.S. capital market is a fair, just and open market. Regulation is very strict. Most of the company's profits are returned to shareholders. Insider trading will definitely catch you and punish you to death!

European capital market regulations are unfavorable for business, and labor laws and tax systems prevent investors from fully earning returns. After a company takes care of its employees and pays high income taxes, there is little left to return to investors. So Europe is not a good investment market.

China, Taiwan and emerging Asian countries have insufficient innovation (most of them are just OEMs, although some are relatively high-end), incomplete systems, and serious hollowing out. Therefore, they are not good investment areas in terms of operating gross profit and shareholder equity.

When you buy SPY, you are buying the 500 largest American companies. When you buy QQQ, you are owning the 100 strongest American companies. Therefore, it is a very diversified and safe investment, spread across 500 companies and 100 companies. Buying QQQ is equivalent to buying the top 100 high-tech companies in the United States, so it is definitely safer than buying a single stock.

Getting rich by investing is about doing the right things and waiting for time.

If you buy the wrong item, it won't matter how long you wait. Even if you buy it right, you will not succeed if you keep operating it.

Investment is like planting a tree. Choose the right species and plant it in the right place. Over time, it will naturally grow into a big tree. If you keep pulling up seedlings and planting them again, you will never succeed. As Buffett said, choose a snowy land with a long wet slope, add a snowball, and if you keep rolling it, it will grow to infinity.

If you do it randomly and pull the saplings here and there, they will definitely die.

Long-term investment makes you rich, short-term speculation makes you old!